Seminar

Activity-based payment and hospital competition

Philippe Choné (CREST)

December 9, 2013, 14:00–15:30

Room MF 323

Industrial Organization seminar

Abstract

Many countries have reformed hospital reimbursement policies to provide stronger incentives for quality and cost reduction. The purpose of this work is to understand how the effect of such reforms depends on the intensity of local competition. We examine the effect of a shift from global budget to patient-based payment for public hospitals in France. Based on a nonprice competition model, we predict that the number of patient admissions should increase in public hospitals by more than in private clinics and that the increase in admissions should be stronger in public hospitals more exposed to competitive pressure from private clinics. Considering the reform implemented in France between 2005 and 2008, we find empirical evidence supporting these predictions. with Lionel Wilner et Engin Yilmaz